Video Gaming Bill Reintroduced in Pennsylvania

Pennsylvania House Bill 808, introduced this week, would authorize video gaming machines for video poker, bingo, keno and other games in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels or clubs, in Pennsylvania. Similar legislation was introduced last year, and we provided an analysis of that bill here. In addition to providing an overview of the legislation, this Alert highlights the many similarities and distinct differences between House Bill 808 and last year’s legislation.

What’s Authorized

Licensed establishments with less than 2,500 square feet would be permitted up to five video gaming terminals. One additional terminal would be permitted for every additional 500 square feet, up to a maximum of 10 terminals. In comparison, last year’s legislation authorized up to only three machines at an establishment.

Maximum wagers are held to $2.50 with a maximum payout of $500 and a payout percentage of 85 percent. The only change from last year’s legislation is a reduction from $1,000 to $500 on the maximum payout.

To read the full text of this Alert, please visit the Duane Morris website.

Pennsylvania Considering Video Gaming Machines Again?

On February 12, 2014, the Pennsylvania House of Representatives’ Gaming Oversight Committee held a hearing to receive testimony regarding the prospects of legalizing electronic gaming devices, i.e video gaming machines, in the Commonwealth. The hearing focused on gaming along the lines of what was raised in a prior session’s bill, (2014 House Bill No 1932), which sought to legalize video gaming machines for bingo, keno, blackjack and other games for use in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels and clubs.

With a looming budgetary deficit Pennsylvania legislators are exploring various ways to increase gaming related tax revenue, including potentially moving forward with internet gaming through its existing bricks and mortar casinos. This recent Gaming Oversight Committee hearing revisiting the video gaming machines issue would be another means through which to generate gaming based tax revenue. The hearing’s witnesses touted the jobs and tax revenues generated by Illinois which implemented video gaming machines in bars, restaurants, taverns and truck stops several years ago – (projected IL tax revenues in excess of $250 million in 2015). While Illinois has had success generating tax revenue and producing jobs with its video gaming machine roll out, the machines do compete, on a low end basis with the states’ existing casinos. While local municipalities in Illinois can opt out of the video gaming program that option may not exist in a Pennsylvania bill and opposition from Pennsylvania’s casino industry remains to be seen.

Also, if considering video gaming at bars and taverns Pennsylvania may be well served to learn from some of the mistakes made with the passage of last year’s Tavern games legislation. Tavern games, with its gaming regulatory scrutiny focused on the bars/tavern owners, rather than through the games’ owners and route operators, lead to cost issues and a reluctance to move forward which hampered widespread implementation of tavern gaming. In addition, while Illinois has had relative success with its multi-tiered system of manufacturers, distributors, operators and establishments, that system has one too many layers to operate as effectively as it otherwise could. Few recall Pennsylvania’s short-lived requirement of local suppliers of slot machines layered between the industry’s manufacturers and end user casinos. The removal of the local supplier requirement opened the way to the implementation of Pennsylvania casinos in 2006. Finally the Pennsylvania Gaming Control Board and its agencies are more than capable of regulating and rolling out video gaming should it become law. Bringing in other, less experienced state agencies, such as Liquor Control or the Department of Revenue would only further complicate and delay implementation should the law pass.

NJ Regulators Seeking Skill-Based Gaming – Possible iGaming Implications

New Jersey’s Gaming regulators garnered attention this week by issuing a press release that they are accepting applications for skill-based games for play in New Jersey’s casinos. This was a friendly reminder to the industry of two things: (1) that the New Jersey Division of Gaming Enforcement’s current regulations already allow for skill-based elements in slot machines; and (2) the Division’s “New Jersey first” policy, whereby gaming products that are submitted for testing to New Jersey prior to, or simultaneously with, any other jurisdiction or testing lab, if approved, can be on the casino floor within 14 days.

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Ten States Consider Internet Gambling Legislation

Internet gambling is currently legal and operating in three, U.S. States – Nevada, New Jersey and Delaware. Additional states, perhaps realizing that the likelihood of federal legislation on the topic anytime soon is remote, considered their own internet gambling legislation this past year. Proposals for new, or expanded internet gambling have, or will likely be considered by California, Colorado, Hawaii, Iowa, Louisiana, Massachusetts, Mississippi, New Jersey and Pennsylvania.

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The Likely Battle Between the State Lottery and Atlantic City’s Casinos

The New Jersey State Lottery, in existence for more than 42 years, has been a source of significant profit for state institutions and state aid for education. Even so, New Jersey has commenced efforts to privatize certain functions of the lottery, with the ultimate goal of increasing revenue and improviing the lottery’s operation. As the process has moved forward, the coexistence between lottery and casinos has become a topic of possible concern, particularly with the legalization of Internet wagering. Partner Frank DiGiacomo takes a closer look at the relationship between lottery and casinos in New Jersey, and what the partial privatization of the lottery may mean for the casino industry going forward in this article published in New Jersey Lawyer.

Third-Party Software Providers–Will the DGE Take a Hard Look at Them?

Gaming, like many other industries, has been greatly impacted by changes in technology. As a result, the laws and regulations governing the gaming industry have begun to adapt in order to keep pace with the evolution of the gaming equipment manufacturing process. Attorneys Frank DiGiacomo and Eric Frank explore some of these reforms in New Jersey in this article from New Jersey Lawyer.

Duane Morris Partner Frank DiGiacomo to Speak on “Regulatory Structure and Impacts of New Jersey’s New Legislation”

Duane Morris partner Frank DiGiacomo will speak on “Regulatory Structure and Impacts of New Jersey’s New Legislation” and “Historical Development of the Federal Regulatory Structure for Gambling: What Needs to Change to Make Internet Gambling Truly Work?” at Law Seminars International’s (LSI) Online Gambling Conference on Monday, February 4, 2013.

Mr. DiGiacomo, the program’s co-chair, will be opening the two-day conference that invites attorneys and business executives involved in the gaming and online entertainment industry. Attorneys who attend are also eligible to receive CLE credits.

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The Pennsylvania Gaming Control Bd Announces it is Accepting Applications for the Remaining Philadelphia Casino License

The Pennsylvania Gaming Control Board announced that it is now accepting applications for the one remaining casino license that must be located within the City of Philadelphia. This is the former “Foxwoods” license which was revoked by the Board in December 2010. The Board set an application deadline of November 15, 2012.

In its announcement, Board Chairman, William Ryan stated that it was in the “best interest of the people of Pennsylvania” to proceed with the application process since it appears that recent legislation, considered by the Pennsylvania General Assembly, which would have amended the current gaming law and allowed the vacant license to be located anywhere within the Commonwealth, is unlikley to move forward.

The licesne fees to operate a casino with up to 5000 slot machines and 250 table games, totals $74.5 million.

PA Gaming Control Board Considers Status of Philadelphia Casino License

The Pennsylvania Gaming Control Board (“PGCB”) Chairman, William Ryan stated that the PGCB met last week to discuss the status of the remaining Philadelphia casino license, which was revoked from its prior holder in December 2010. Ryan stated, “At least for now, we decided not to do anything,” however [the Board] will revisit the issue… in the not too distant future.” The second Philadelphia casino license, however is not the only remaining opportunity for a new casino in Pennsylvania. There is a pending challenge to the Board’s awarding of a “resort” casino license to Nemacolin Woodlands Resort outside of Pittsburgh. There is also a remaining racetrack casino license recently held by Centaur in western PA.

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